GOP 'ObamaCare' alternative is a sick joke

First, a reminder that the Affordable Care Act aka "ObamaCare" was designed by Gov. Mitt Romney's health care advisors and is modeled after "RomneyCare" in Massachusetts. It is "ObamneyCare."

RomneyCare originated with the Heritage Foundation as the Republican alternative to the Clinton health care reform proposals of the 1990s. The health care reform favored by the Democratic wing of the Democratic Party in recent years is "Medicare For All," a single-payer system that is far less complex and is more cost effective.

The "RomneyCare" Republican health care plan was supported by Republicans until the black guy in the White House, that secret socialist Muslim born in Kenya, Barack Obama, announced that he would support their plan. Suddenly the hybrid "ObamneyCare" was something created in the bowels of hell by Satan. Republican members of Congress who had sponsored the legislation and promoted it in the past were suddenly opposed to it. Such is the insanity induced by the Obama Derangement Syndrome era.

President Obama, having cleverly adopted the Republican plan as his own, left the Republicans without an alternative. And for four years the Republicans have been promising an alternative health care plan to what they refer to as "ObamaCare" in the hope that people will forget that it is their plan.

After four years, the Republicans are saying they finally have an alternative to their Heritage Foundation/RomneyCare/ObamneyCare health care plan. The outlines of the plan are a rehash of old proposals floated and rejected for years, and restores to insurers the financial advantage they enjoyed over consumers before "ObamaCare." It would cover far fewer people, limit coverage and allow for exclusions, and result in a tax increase for employer-sponsored health insurance plans.

House Republicans plan to pass a healthcare reform bill that could replace the Affordable Care Act, Majority Leader Eric Cantor announced Thursday.

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Cantor said the proposal would build off of various alternative health plans that Republicans have offered this year, a Republican aide said, and would allow consumers to buy plans across state lines, reform medical liability and create health savings accounts, among other components.

We have been over this before. Buying insurance across state lines is doublespeak for undermining state insurance regulatory agencies (a power of the states), which for most states is already weak to nonexistent. This creates a "race to the bottom" as we have seen in other financial services, like credit cards (South Dakota). Insurers would exercise financial advantage over consumers through choice of law provisions to choose the state with the weakest regulations and force you to sue them in a foreign jurisdiction.

Reform medical liability is doublespeak for "tort reform," i.e., limiting your constitutional right under the Arizona Constitution to recover damages for injuries. Republicans have tried to repeal this constitutional provision several times, and the voters have always rejected it. This federal law presumably would supersede Arizona's Constitution under federal supremacy. This is not about medical cost savings. This is about benefiting insurers who underwrite malpractice insurance. U.S. malpractice lawsuits are less than 1% of healthcare costs. See also, Facts and Myths About Medical Malpractice.

And health savings accounts? We already have them, for years now. The problem with health savings accounts is that it only benefits people who have enough disposable income to invest in them. Those who are struggling to make ends meet or who are poor or without a job will not benefit from a tax policy designed to only benefit upper-income earners. They are left to the GOP "ownership society" -- "You're on your own, baby!"

By now, you may have heard about a new Republican health care plan—and how great it is. The proposal, which its authors call the “Patient CARE Act,” would hollow out the Obamacare infrastructure and replace it with a system more to conservative liking. There would be less government spending, lower taxes, fewer regulations—and yet, the sponsors promise, it would achieve roughly equal results when it comes to expanding insurance coverage.

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Sound too good to be true? That’s because it is.

The Washington Post's Sarah Kliff also has an analysis at the Wonkblog, Republicans have an Obamacare substitute: "Republicans have an Obamacare replacement. Economists will love it, real people won’t."

Despite all the heated rhetoric from Republicans about Obamacare laying ruin to America, the plan would actually keep some of the law’s key provisions. It would preserve some subsidies for lower-income people to buy private insurance, though it would change the way they are calculated. Those $700 billion worth of Medicare savings Mitt Romney denounced during the 2012 campaign? Republicans would keep them. Allowing young adults to stay on their parents’ plan until age 26? Republicans would keep that, too. And the ban on lifetime insurance caps, so people with very expensive diseases don’t lose insurance? Republicans wouldn’t touch it.

But in other crucial ways, the Republican plan is different. First, Obamacare’s absolute ban on withholding coverage from people with pre-existing conditions would be rolled back. Those who remained continuously insured would stay protected, so they couldn’t be charged higher rates or be excluded entirely. But if their insurance lapsed, health insurance companies could charge more or refuse to cover them.

Second, it would shrink the Medicaid expansion. Pregnant women, children and families below the poverty line would still be eligible, but childless adults would not. States would be given a fixed amount per person enrolled in Medicaid to reduce spending.

Third, the Republicans would provide tax credits for people to buy insurance, but only for families earning up to $70,650 per year. (The Affordable Care Act’s subsidies go to families earning up to $94,200.) And employees of large companies, even if those companies did not offer health insurance, would be exempt, regardless of income.

The largest difference is in cost control. Currently, employer-sponsored health insurance is tax free; the Republican plan would make employees pay income tax on at least 35 percent of what their company pays for their plan. The idea is to make patients pay more for their coverage, giving them an incentive to choose cheaper health insurance plans with more deductibles and co-payments, which, in turn, would encourage them to shop around for cheaper tests and treatments and forgo unnecessary ones.

On a more individual level, this is what the Republican plan means: If you are one of the 150 million Americans who get their health insurance through an employer-sponsored plan, get ready for a big tax increase. For a family in the 28 percent tax bracket (earning around $150,000 per year), according to my calculations, it would add up to about $1,470 per year.

Here’s how you get that number: In 2013, the average employer-sponsored insurance plan cost $16,351 for a family of four. On average, employers pay 72 percent of that premium, or $11,786. The Republican plan taxes 35 percent of the employer contribution, meaning that an additional $4,125 would be counted as income and subject to both payroll and income taxes. So that family would pay about $1,154 in income taxes and $316 in payroll taxes — $1,470 per year. Obviously, people would pay even more if their health-insurance premium was higher, if they were in a higher tax bracket, or if their state had an income tax.

People who don’t get insurance through their employer would also be likely to pay more. The Republican plan would provide the unemployed, people in the individual market and those working for small businesses that don’t provide health insurance a tax credit to buy private insurance. But the credit increases only by age, not by need — which means people with lower incomes would pay much more than they would under Obamacare. For example, under the Republican plan, a 30-year-old man living in New York City earning $35,000 a year would pay the full price of insurance, roughly $4,383 for a typical plan. Under Obamacare, he would pay $3,325. A 30-year-old earning $25,000 would get a $1,560 tax credit and pay roughly $2,823 under the Republican plan, but pay only $1,728 under Obamacare.

In addition, the proposed plan would take us back to the old days when insurance companies could charge women more than men for the same health plan. And older people would also be penalized. Under the Affordable Care Act, insurance companies are allowed to charge 64-year-olds only three times what they charge 21-year-olds. But the Republican plan allows insurance companies to charge 64-year-olds five times more. So a 64-year-old individual could pay as much as $21,900 for a plan that costs a 21-year-old only $4,380.

The plan would bring back many insurance company shenanigans. For instance, the decision to roll back the ban on excluding those with pre-existing conditions . . . So if you lose your job and therefore your employer-sponsored health insurance, you would not be excluded for a pre-existing condition if you immediately bought your own insurance. But if there were a gap in coverage, insurance companies could deny you coverage.

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Finally, there is the issue of prevention. The Affordable Care Act made preventive services free. To save money, Republicans want to reverse that, so that Americans will behave like cost-conscious consumers — getting their blood tests at a cheaper laboratory or their CT scans at the cheaper imaging center. The problem is that mountains of evidence show that when patients have to pay, prevention is the first thing to go, in part because people aren’t suffering pain or other symptoms, and the benefits of preventive services are typically years away. Saving money by cutting back these services makes no economic sense in the long-term.

There are many other problematic things the Republican plan does, like eliminate the health law’s taxes on health insurance, drug and device companies; allow insurance companies to sell plans that don’t cover maternity, mental health or other types of care; and allow insurance companies to impose annual limits on benefits.

We finally got the “replace” part of the Republicans’ pledge to “repeal and replace” the Affordable Care Act. Now that Americans have the chance to examine the alternative, it might help them see the advantages of Obamacare.

The bottom line is that Republicans do not have your health or your interests as a consumer of health insurance at heart. Their only interest is to serve the interests of their masters, the banksters of Wall Street, which includes the nation's insurance industry.

It seems the Senate Republicans noticed this problem -- a significant tax increase on average Americans isn't likely to be a winner when the GOP has spent years decrying Obamacare's impact on the middle class -- and changed the proposal's specifics accordingly. Or they realized how poorly they worded the original proposal and sought to clarify their intentions. It's impossible to say, and their offices declined to explain.

Some time after the original proposal was released Monday, a new one-page explainer on the tax provisions appeared on Coburn's website, below the link to the original proposal. And it included a huge change. The cap would now be "65 percent of the average market price for an expensive high-option plan" instead of just "an average plan's costs," as the original proposal said. The language in the original eight-page proposal had not been changed as of Thursday evening.

What that change would mean exactly in terms of employer coverage and revenue is impossible to know without specific legislative language, which isn't yet available. But it would reduce the tax impact for most Americans, compared to the original proposal, by significantly raising the threshold for when you start paying taxes on your insurance contributions.

Comments

First, a reminder that the Affordable Care Act aka "ObamaCare" was designed by Gov. Mitt Romney's health care advisors and is modeled after "RomneyCare" in Massachusetts. It is "ObamneyCare."

RomneyCare originated with the Heritage Foundation as the Republican alternative to the Clinton health care reform proposals of the 1990s. The health care reform favored by the Democratic wing of the Democratic Party in recent years is "Medicare For All," a single-payer system that is far less complex and is more cost effective.

The "RomneyCare" Republican health care plan was supported by Republicans until the black guy in the White House, that secret socialist Muslim born in Kenya, Barack Obama, announced that he would support their plan. Suddenly the hybrid "ObamneyCare" was something created in the bowels of hell by Satan. Republican members of Congress who had sponsored the legislation and promoted it in the past were suddenly opposed to it. Such is the insanity induced by the Obama Derangement Syndrome era.

President Obama, having cleverly adopted the Republican plan as his own, left the Republicans without an alternative. And for four years the Republicans have been promising an alternative health care plan to what they refer to as "ObamaCare" in the hope that people will forget that it is their plan.

After four years, the Republicans are saying they finally have an alternative to their Heritage Foundation/RomneyCare/ObamneyCare health care plan. The outlines of the plan are a rehash of old proposals floated and rejected for years, and restores to insurers the financial advantage they enjoyed over consumers before "ObamaCare." It would cover far fewer people, limit coverage and allow for exclusions, and result in a tax increase for employer-sponsored health insurance plans.

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